Why Regulate Accounting?
Many people wonder why the idea to regulate accounting is becoming so
popular. Due to past experiences with manipulating accounting figures, it
is no wonder that accounting has been under so much scrutiny. This is the
reason why so many people feel it is time to regulate accounting, due to
so many companies not abiding by the rules set forth. Because of the many
negative incidents that have occurred with different scandals and
schemes, there has been a lot of mistrust form the public in the
accounting field. To regulate accounting, will give confidence back to
the public. Here are some of the benefits that will arise when we set
higher standards to regulate accounting.
A majority of the public feel that accountants are working in the
interest of their own company and the companies that they work for,
instead of working to inform the public properly. When you regulate
accounting, this prohibits any company and accounting firm to hide the
truths about the company and its financial status form the public. The
regulation of accounting, will force companies and their accountants to
be more open and straightforward about their financial dealings and show
their true financial situation.
When you regulate accounting, it will play an important role in the stock
market as well. There are many mixed feelings about investing in publicly
traded companies, because of the capabilities to hide a companies
financial distress. If you regulate the accounting laws, then it will
lower the chances of a company being able to manipulate any financial
reports shown to the public, which is a dilemma that has happened in the
When you regulate the accounting laws, you will hold corporations and
public organizations responsible or their actions. This is a very
important part in regulating accounting practices. With tougher laws in
place to prevent fraud and to prevent special favors, the public will be
safer against fraud. To regulate the laws, will let not accounting firms
and businesses alike, aware that they will be held accountable for their
actions. Not only will this give confidence back into the accounting
field, but it will also deter fraudulent activities in the accounting
industry due to the strict consequences.
The most important reason to regulate accounting laws, is to protect the
public. Whether it is a publicly traded company, or a company that gains
a majority of investments form its workers, both alike need to be
protected form fraudulent activities. This is very important and is why
the government has leaned to regulate accounting and its laws and
practices. It has been proven by past experience, to not have strong
accounting guidelines in place and enforced, only leaves room to lead to
a disastrous result.
There are many mixed feelings regarding the ideas to regulate accounting.
However, despite the mixed opinions, the idea to regulate accounting is
strong. It is not only the responsible thing to do, but it will also
safeguard the public form companies and fraudulent activities that could
occur. To not regulate accounting laws and practices will only leave room
to gather more mistrust in the accounting.